Reverse Mortgage In Arizona

Many retirees in the United States need more financial resources to handle escalating health care and living costs. Reverse mortgages can be easy for seniors with no mortgage or a paid-off mortgage to get the money they need to enjoy their retirement years comfortably.

What is an Arizona Reverse Mortgage?

A reverse mortgage is a loan that enables senior citizens to convert a portion of their home’s equity into cash. The lender makes payments to the borrower instead of the borrower making payments to the lender. It is primarily intended for retirees who may encounter financial difficulties due to their lack of income. Reverse mortgages can accomplish both short- and long-term financial objectives.

Arizona’s minimum age requirement for a reverse mortgage is 62 years old. According to 6-1704 of the Arizona Revised Statutes, a reverse mortgage may include a fixed or variable interest rate or a future sharing between the originator and borrower of the property’s appreciation in value. The reverse mortgage agreement must conspicuously disclose any interest rate or other fees charged during the period beginning on the date the reverse mortgage becomes due and ending on the date of full repayment.

According to the Federal Housing Administration (FHA), the loan is typically repaid once the occupant sells the property, moves out, or dies. The loan must be repaid, and any remaining equity belongs to the homeowners or their heirs.

Types of Reverse Mortgages in Arizona

There are three principal categories of reverse mortgages: single-purpose reverse mortgages, Home Equity Conversion Mortgages (HECMs), and proprietary reverse mortgages.

Each form of reverse mortgage offers a unique set of advantages. Single-purpose reverse mortgages, for instance, typically have low fees, making them an affordable option for seniors who need money for a particular purpose. HECMs, on the other hand, are widely accessible, can be used for any purpose, and are federally insured, providing security. If your property has a high market value, a proprietary reverse mortgage may offer you a more considerable loan amount.

• Single-Purpose Reverse Mortgages

A single-purpose reverse mortgage is a loan given to homeowners, usually seniors 62 or older, in return for a portion of the borrower’s home equity. With this type of reverse mortgage, the borrower has to use the money for a specific reason that has been allowed by the lender.

Some state and local government agencies, as well as non-profit organizations, provide these loans, and as the name implies, they can only be used for one purpose defined by the lender, such as home upgrades or property taxes. The benefit is that they are usually relatively modest in cost; some are even available to homeowners with low to moderate income.

• Home Equity Conversion Mortgages (HECMs)

HECMs are reverse mortgages insured and backed by the U.S. Department of Housing and Urban Development (HUD). This is the most typical type of reverse mortgage. Home equity conversion mortgages (HECMs) allow homeowners to receive payments in a lump sum, monthly installments, a line of credit, or a mix of these choices. The funds can be utilized for anything.

The home’s appraised value determines the loan amount, subject to FHA limits. The borrower receives a cash advance against their home’s equity value. The outstanding loan balance accrues interest, but payments are only required once the home is sold, the borrower passes away, or the borrower vacates the property; at this point, the entire loan must be repaid.

• Proprietary Reverse Mortgages

A proprietary reverse mortgage is a loan that allows senior homeowners to access the equity in their property through a private lender instead of a federally insured program. These mortgages are frequently called jumbo reverse mortgages, as they are typically pursued by borrowers who need more money than a federally insured reverse mortgage can provide. The Federal Housing Administration (FHA) does not insure this type of reverse mortgage.

These are private loans guaranteed by the organizations that develop them. Proprietary reverse mortgages can be used for any purpose and are typically chosen by homeowners with higher property values to access more equity than is possible with a HECM.

Apply for a Reverse Mortgage in Arizona

A reverse mortgage can significantly assist Arizona homeowners seeking additional retirement income. Capital Home Mortgage can assist you in acquiring the funds necessary to supplement your retirement income. We are a direct Arizona mortgage lender, giving you access to the state’s most competitive interest rates and lowest fees.

Please contact us at (480) 360-6650 if you have any concerns or require additional information about our mortgage products.